Ongoing macro uncertainties and elevated inflation continued to plague asset classes across the board in September. Investors again witnessed the fragility of the global financial system, in the face of surging yields and tightening liquidity, as the British pound plunged to an all-time low. This report discusses whether what happened in the U.K. may be a precursor to other financial accidents lurking in the wings and the historical precedent of the Fed – the world’s de facto central bank – intervening to address these crises to prevent spillover into our markets.
Policy Risks Galore
October 3, 2022